House Hunting? Make it easy on yourself!

Looking for the perfect home? Did you know that I can set you up to be automatically notified – 24/7, 365 days per year – anytime a home matching your specific criteria comes on the market? You’ll get all the info relating to the properties that come your way, including photos and a map. With that kind of informative and real-time system working for you, I can arrange a private viewing as soon as possible. Stay ahead of the crowd. Give me a call and let’s start looking for your dream home today!

Tyler O’Donovan B.A., Sales Representative
RE/MAX Twin City Realty Inc., Brokerage
83 Erb Street West, Waterloo, ON N2L 6C2
Office Telephone: 519-885-0200
E-mail: tylerodonovan.remax@gmail.com
Website: www.tylerodonovan.com

No bubble to pop in Canada’s housing market

OTTAWA – Canadian house prices may be headed for a modest decline nationally and in some local markets, but fears of a housing bubble are exaggerated, according to The Conference Board of Canada’s initial Housing Briefing: Bubble Fears Overblown.

“Mortgage costs, not just house prices, are the principal deciding factor for potential homebuyers,” said Robin Wiebe, Senior Economist, Centre for Municipal Studies. “Mortgage rates are expected to rise this year, but not dramatically, because the Canadian economy remains in a slow-growth mode.

“The housing market may be undergoing a correction in some regions and market segments, but it is more likely to be a soft landing than a bubble bursting.”

HIGHLIGHTS

Mortgage costs remain relatively low, which maintains affordability for home buyers.
Resale markets in major Canadian cities are generally balanced.
A soft landing in the Canadian housing market is the most likely scenario.

Fears of a housing bubble hinge on the ratio of house prices to apartment rents and house prices to incomes. The Conference Board’s view is that while these ratios are high, they are also misleading. Better indicators of affordability are the ratio of mortgage payments to rents and mortgage payments to incomes, and neither presents much cause for alarm about a housing bubble.

In addition, Canadian employment continues to increase, albeit modestly, and the national population is growing. In general, housing starts are in line with demographic requirements, and markets do not appear to be overbuilt. Total housing starts in Canadian cities with at least 10,000 residents ended 2013 at just below 170,000 units. Although down from nearly 194,000 starts in 2012, this is in line with Canada’s 25-year average.

Furthermore, a low proportion of Canadian mortgages are in arrears. As a result, a market downturn in Canada would not be amplified by a wave of “distressed” home sales, as occurred in the United States in the 2000s.

Over the medium-term, a modest market correction, particularly in market segments in Ontario and Quebec as projected rising interest rates potentially crimp affordability, could produce a moderate decline in the national average housing price.

The outlook provides assessments of six major Canadian markets.

Vancouver’s resale market moved back into balance last spring. Sales were up briskly from a year earlier in each of the last three months of 2013. Prices are also growing strongly, although the current pace is unsustainable and slower advances are expected in 2014.
Calgary’s resale market is approaching sellers’ conditions. Sales have not fallen on a year-over-year basis since April 2011, and price growth accelerated sharply last year.
Edmonton’s resale market is balanced. Sales rose briskly in 2013 and price growth is picking up along with sales.
Toronto’s resale market is balanced. Sales stabilized in June 2013, and rose on a year-over-year basis during each of the six months leading up to the end of 2013. Price growth remains healthy and a major price correction is hard to envision, given solid employment and population growth. While the condominium market is at some risk, a soft landing appears to be the most likely scenario.
Ottawa’s resale market is balanced. Falling employment is contributing to sluggish resale conditions. Sales were largely flat last year, but prices continue to rise gently. Total housing starts remain soft by historical standards.
Montréal’s resale market is flirting with buyers’ territory. Sales and average prices were largely below year-earlier levels in 2013. Both single-detached and multi-family starts slowed last year.

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10 tips for homebuyers and sellers in 2014

Goodness, is it 2006 again? At the dawn of 2014, it feels like it.

Homeowners enjoyed double-digit price growth in the first half of 2013, greatly exceeding experts’ predictions of a year ago and even settling into pre-recession values in many markets. Though there was some softening in the second half, sellers remain in their element and are turning the screws on anxious buyers who fear further price spikes and escalating interest rates. New-construction home sales are up, previously underwater properties are in positive equity again and investors are turning their attention to “secondary markets” to find value. Economists expect house prices to rise another 4 percent to 5 percent in 2014, meaning remaining bargains will get even more sparse.

With that in mind, here are 10 tips befitting the up-market of 2014.

Sellers: Jump-start the process.

You may be an avowed procrastinator, but if you want to sell a house this year, start planning now. The process, say sellers, always takes longer than expected. So get your home inspected now; there may be unseen major repairs to address. Declutter, clean closets and shelves, store extraneous possessions and furnishings and other stuff that might keep sellers from picturing themselves in your space. Attend an open house or two to get an idea of how to stage yours. And move along: Owners still waiting for the market to peak should beware that this real estate cycle may be shorter-lived than last.

Check mortgage interest rates available in your area.

Buyers: Be credit-ready.

There’s a lot of competition out there for homes, so tarry not. Get your credit report and start repairing any blips. If your scores are below 620 or so, a conventional loan will be a challenge. But if they’re under 740, you still might not get the best rates. Many buyers get a prequalification letter from the lender, but you can one-up them with a preapproval, which comes after a more thorough evaluation of your finances. A preapproval letter shows the seller that you’re good to go and can close quickly.

Sellers: Vet your real estate agent, then follow the agent’s advice.

Sellers lose time and money by hiring poorly. Interview several potential agents. You’ll want a full-timer who is Web savvy and uses mobile technology, because at least 4 in 5 buyers view their homes first online. Your agent should be a proven performer in your submarket and be willing to walk you through the financial aspects of your deal. The more the agent knows about schools, commutes and other local details, the better. Once vetted, accept your agent’s advice on pricing, marketing and negotiation.

Buyers: Adjust your negotiating expectations.

Lowball offers are off the table in this environment and could eliminate you from consideration. Respond to counteroffers quickly to keep other buyers from entering the picture; you don’t want to encourage a bidding war. If one breaks out, be prepared to get fewer concessions and pay more money. And have a few other homes in mind so you can be willing to walk away if the price soars.

Sellers: It’s your market (finally) so make the most of it.

At long last, it’s a seller’s market! While you’re interviewing agents, be wary of those offering too-good-to-be-true price opinions because they may be trying to “buy” your listing. And don’t jump at that first (seemingly) generous offer, especially if sellers are getting multiple offers. If you’re getting your price and then some, give something back to the buyer in good faith, such as an early move-in date or some personal property you’re not attached to. Never let the buyers’ agents know what you’re willing to do, though. Make them ask.

Buyers: Find life after foreclosure.

Have a foreclosure in recent years? Join the crowd. Though you might think you have to wait seven years to get another conventional mortgage, Fannie Mae, Freddie Mac and the FHA say they actually require just a three-year waiting period if the foreclosure was caused by extenuating circumstances. There are plenty of nonconforming lenders — often called “shadow bankers” — out there if you can endure a big down payment (around 20 percent) and above-market interest rates. Or consider a lease-purchase or lease-option where you pay the homeowner a monthly premium above your rent for the right to buy at a set price later.

Sellers: Hesitate to renovate.

We hear that newly renovated homes are easier sells, and that’s true. So is it time to remodel that outmoded kitchen? Not if you plan to sell soon. According to remodeling surveys, the average renovation project returns only about two-thirds on investment. For example, a major bathroom remodel costing $15,000 yields about $10,000 in resale value. The same goes for a major kitchen remodel. In most cases, it would be cheaper to issue credits to buyers or drop your price a few grand. Lighter jobs like new doors are more practical and return about 85 percent. But feel free to spend a bit on paint (basic colors), curb appeal and fence replacement to enhance exteriors.

Buyers: Ask and you won’t receive (an unpleasant surprise).

You’d be dismayed at the things sellers aren’t obliged to disclose in most states, including on-premises felonies, suicide, murder or a neighboring sex offender. Don’t be afraid to thoroughly question the selling party in writing before signing the contract. Some questions: Is there a cell tower, water tower, natural gas well, oil well or other non-residential construction scheduled to be built in this neighborhood (then define “neighborhood”)? Is there commercial zoning on nearby vacant land? Is the yard prone to flooding? Are train whistles or other regular loud noises audible there? Did known criminal activity occur in the house? Have there been reported hauntings? Are there loud neighbors, dogs or other noise pollution? Are there registered sex offenders or other known criminals living nearby? If the selling party refuses to answer any of these questions, that’s a bright red flag.

Sellers: Tailor your local game.

Folks who base their selling decisions on trends on cable news are often left wondering, “Why can’t I sell at this price?” The truth is, all markets are different and all real estate is local, and prices can vary greatly even in adjacent subdivisions. Home prices are dictated largely by demand, land availability, foreclosures and employment. Most local real estate offices will provide market stats and at least a few recent comp sales in hopes of earning your business. Additional trend data can be found online or in local newspapers and business journals. A polite call or email to a local real estate appraiser might net more info or links to local statistics.

Sellers and buyers: Heed changing trends.

Pay attention to trends and react accordingly. Thinking of laying carpet? Agent surveys in the past few years show homes with hardwood floors or faux wood laminate floors are far faster sells. You still want to be in suburbia? Millennials don’t. Numerous cities — such as Austin, Texas; Portland, Oregon; and Minneapolis — have watched this more environmentally conscious generation flock to “mixed-use” urban districts served by trendy cafes, nightclubs, bike paths, civic events and mass transit. For now, they’re not buying condos, which haven’t recovered like the single-family market. They’re renting — but watching the condo market ever so carefully.

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